Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks

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building INTELEK Repository
collection Online Access
collectionurl https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection407072
date 2017-12-28 11:07:35
eventvenue Universiti Sultan Zainal Abidin
format Restricted Document
id 6417
institution UniSZA
originalfilename 1298-01-FH03-FESP-18-12090.pdf
person Donal Devi Amdanata
recordtype oai_dc
resourceurl https://intelek.unisza.edu.my/intelek/pages/view.php?ref=6417
spelling 6417 https://intelek.unisza.edu.my/intelek/pages/view.php?ref=6417 https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection407072 Restricted Document Conference Conference Paper application/pdf 3 1.6 Adobe Acrobat Pro DC 20 Paper Capture Plug-in Donal Devi Amdanata 2017-12-28 11:07:35 1298-01-FH03-FESP-18-12090.pdf UniSZA Private Access Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks PURPOSE AND BACKGROUND Regional Development Banks (RDBs) were established by provincial governments in Indonesia to support development at the regional level. As government-owned banks, RDBs receive numerous assistance and preferential treatments from the government. It is acceptable for the RDBs to obtain the privileges and government’s support since RDBs fall under the category local companies and thus, their assets belong to the respective states. Competitive advantage may be achieved when RDBs received certain benefits which result in reduce their operating costs or increase revenues in ways not available to their competitors. As a stateowned bank, RDBs have the advantage of getting direct awards for the business activities of the government without having to compete with other banks. At the same time, the RDBs are also associated with disadvantageous or unfavorable branding that is automatically attached to them as government-owned companies. There are three weaknesses associated with government-owned or Government-Linked Companies (GLCs). Firstly, they have only a small chance to compete outside of their regions. Secondly, market orientation sets by the government tend to hamper development efforts outside their business areas. Thirdly, for the RDBs in particular, competitions with other national and private banks as well as international banks may reduce their desired profits. Thus, the objectives of this research are: (i) to determine the effect of government ownership on the RDBs performance; and (ii) to determine the effect of competitive advantage on the RDBs performance. One of the roles of the RDBs is to help finance the development of provincial and district governments in Indonesia. These regional or provincial governments have limitations in collecting funding and financing. The regional governments can only raise community taxes but cannot perform activities as business enterprises and they are not allowed to form agreements with business enterprises. Therefore, RDBs as intermediary institutions are needed to support the provincial governments in conducting fund-raising activities and fund disbursements. To date, the impact of competitive advantage of Indonesian state-owned banks has not yet been studied. International Academic Conference on Business and Economics Universiti Sultan Zainal Abidin
spellingShingle Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
summary PURPOSE AND BACKGROUND Regional Development Banks (RDBs) were established by provincial governments in Indonesia to support development at the regional level. As government-owned banks, RDBs receive numerous assistance and preferential treatments from the government. It is acceptable for the RDBs to obtain the privileges and government’s support since RDBs fall under the category local companies and thus, their assets belong to the respective states. Competitive advantage may be achieved when RDBs received certain benefits which result in reduce their operating costs or increase revenues in ways not available to their competitors. As a stateowned bank, RDBs have the advantage of getting direct awards for the business activities of the government without having to compete with other banks. At the same time, the RDBs are also associated with disadvantageous or unfavorable branding that is automatically attached to them as government-owned companies. There are three weaknesses associated with government-owned or Government-Linked Companies (GLCs). Firstly, they have only a small chance to compete outside of their regions. Secondly, market orientation sets by the government tend to hamper development efforts outside their business areas. Thirdly, for the RDBs in particular, competitions with other national and private banks as well as international banks may reduce their desired profits. Thus, the objectives of this research are: (i) to determine the effect of government ownership on the RDBs performance; and (ii) to determine the effect of competitive advantage on the RDBs performance. One of the roles of the RDBs is to help finance the development of provincial and district governments in Indonesia. These regional or provincial governments have limitations in collecting funding and financing. The regional governments can only raise community taxes but cannot perform activities as business enterprises and they are not allowed to form agreements with business enterprises. Therefore, RDBs as intermediary institutions are needed to support the provincial governments in conducting fund-raising activities and fund disbursements. To date, the impact of competitive advantage of Indonesian state-owned banks has not yet been studied.
title Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
title_full Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
title_fullStr Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
title_full_unstemmed Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
title_short Government Ownership And Competitive Advantage: The Impact On Performance Of Indonesian Regional Development Banks
title_sort government ownership and competitive advantage: the impact on performance of indonesian regional development banks